FAQ: Collections

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Q: Can my Social Security (SSA) or Supplemental Security (SSI) benefits be garnished?


A: SSA and SSI benefits are exempt from garnishment except for child support, alimony and debts owed the federal government such as back taxes. However, the exemption doesn't happen automatically. The burden is on you to object if a creditor attempts to garnish an account containing SSA or SSI payments. Generally, garnishment can only be attempted if your creditor has sued you and there is an unpaid court judgement. (If you owe money to the bank or credit union where you deposit your checks they may access that money without a court judgment.) A creditor can attempt to garnish your bank or credit union account if a judgment is not paid within 21 days. Your are supposed to be given notice and 14 days to go to court and prove the money in the account is exempt. If you don't get into court within the time limit the SSA or SSI benefits can be garnished. Even if you do meet the time limit to object to garnishment the account will pobably be frozen until the court makes its decision. This means you might not have access to your income for a nuber of weeks. For this reason, if you are sued you may want to have your SSA or SSI Check sent direct to you rather than deposited in a financial institution. You would then cash the check immediately and pay your bills in cash or money order with receipts.



Q: Am I responsible for my spouse's personal debts?


A: Michigan law does not make your responsible for your spouse's individual debts just because you are married. You would be responsible if you agreed to be, for example by cosigning a loan. If your spouse as died and lift a probate estate or trust then his/her creditors must be paid before family members (with the exception of some set family allowance amounts). If you owned assets jointly they passed automatically to you at death and are not subject to your deceased spouse's individual debts.



Q: Can I sue a driver who damaged my car in an accident?


A: Under Michigan's no-fault insurance law your own collision coverage is supposed to pay for damages to your car no matter who is at fault in an accident. This means you probably will be personally responsible for damages to your car if you purchased collision coverage. If the other driver had no-fault insurance then the most you can sue for is $500 in out of pocket expenses such as a deductible that you had to pay. This $500 limit is referred to as "mini-tort". To win you must prove the other driver was 50% or more at fault. If the other driver was not insured you can sue for the full amount of your out of pocket expenses. The actual amount of your money damages will be based on the other driver's percentage of fault. Your can sue in small claims court for damages of $3000 or less. To collect on a court judgment you can garnish bank accounts or wages and ask the Secretary of State to revoke the other driver's license until the judgment is paid (the court can allow installment payments).


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